ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Saturday, March 22, 2008

Two Reasons Not to Contract with the Government

Although I teach contracts and contribute to this blog, I am not a contracts scholar.  My main research interests lie at the intersection of U.S. constitutional law and international law.  But in that context, I have been thinking a lot of late about how current trends in the law create substantial disincentives for entities to enter into contracts with the U.S. government.  I'm sure that readers who deal with government contracts regularly can think of many more, but I want to focus on two developments that would give me pause if I were considering entering into a contract with the U.S.

For more bloviation, click on the link . . .

The first development has to do with international agreements.  For simplicity's sake, let's say there are two approaches to understanding why states enter into and abide by international agreements.  I'll call the first approach normative.  It is associated with people like Tom Franck and Harold Koh who argue that states are compelled by notions like legitimacy and fairness to enter into international agreements that implement international norms or norms that have been internalized by states parties.  From the perspective of the normative approach, something like waterboarding simply cannot be justified.  Call it torture, call it cruel, inhuman or degrading treatment, it clearly violates international norms and is categorically prohibited. 

I'll call the second approach Realism and reduce Realism to the belief that states are rational, self-interested actors that enter into and abide by international agreements to the extent that doing so furthers national self interest.  Variations on Realism dominated political science departments for decades before it was discovered by international legal scholars.  Now, through the writings of people like Jack Goldsmith, Eric Posner, and Adrian Vermeule, international legal scholarship is taken up with the Realist model as never before.  In the context of the War on Terror, these neo-Realists, or neo-Nationalists, or New Sovereigntists (whatever you want to call them) have argued for extensive executive authority to do whatever is necessary to national defense.  By the way, for a brilliant, short critique of this approach as it relates to torture, see Alice Ristroph's Professors Strangelove.  A more extended but also very intelligent critique can be found in Thomas Crocker's, Torture, with Apologies. 

My point here is a simple one.  Let's assume that the U.S. signed the Geneva Conventions banning cruel, inhuman and degrading treatment based on the simple Realist principle of reciprocity.  We promised not to, for example, waterboard detainees because we don't want our soldiers waterboarded.  JAG officers testifying before Congress cited this concern in voicing their opposition to proposed legislation (subsequently enacted) that would insulate the government from lawsuits brought by Guantanamo detainees alleging that their rights protected under the Geneva Conventions were violated.  So, in addition to normative arguments, there are solid Realists arguments for abiding by our international obligations.  But reigning theories of the unilateral executive embodied in both the scholarly and political efforts of Robert Delahunty, Jack Goldsmith and John Yoo suggest that those obligations can be set aside whenever the executive branch finds it expedient to do so.  If I were a international entity considering entering into an agreement with the United States, this doctrine would give me pause, especially as there is no limit on what the executive branch can do in the name of national security.  Today, it may set aside the Geneva Conventions, tomorrow it may decide that the U.S. cannot abide by its environmental agreements, the Law of the Sea, trade agreements, etc. because doing so would undermine national security.

Fine, you're saying.  But I'm not an international entity, so I don't have to worry.  Well, the problem you have as an individual contracting with the United States is secrecy.  Let's say you enter into some sort of commercial contract with the U.S. government.  You may be a defense contractor; you may be a government employee; you may be involved in something related to U.S. surveillance operations.  I'm not saying you're a spy; you may just be a software designer facilitating surveillance.  Now, let's say the government breaches its agreement with you, or maybe it fires you based on your race or gender or because you blew the whistle on some illegal conduct by your immediate superior.  The government can stop your law suit in its tracks by invoking the state secrets privilege and your case will be dismissed before you even get to discovery.  I have an article on this topic coming out in the Temple Law Review.  For those of you who just can't wait, you can have a look at a draft version here.

My point is pretty basic.  Current policies, largely informed by a bizarre infatuation with executive power, create disincentives for rational actors to contract with the United States.  The predictable result of this is higher transactions costs as the U.S. seeks to overcome the obstacles it has needlessly placed between itself and individuals and entities otherwise willing to assist the U.S. in achieving its legitimate goals.

[Jeremy Telman]

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